This paper characterizes long-run and short-run optimal fiscal policy in the labor selection framework. In a calibrated non-Ramsey decentralized equilibrium, labor market volatility is inefficient. Keeping fixed the structural parameters, the Ramsey...

This paper characterizes e fficient labor-market allocations in a labor selection model. The model's crucial aspect is cross-sectional heterogeneity for new job contacts, which leads to an endogenous selection threshold for new hires. With...

This paper proposes a simple framework to model social preferences in a game theoretic framework which explicitly separates economic incentives from social (context) effects. It is argued that such a perspective makes it easier to analyse contextual...

We characterize efficient allocations and business cycle fluctuations in a labor selection model. Due to forward-looking hiring and labor supply decisions, efficiency entails both static and intertemporal margins. We develop welfare-relevant measures...

The European Emissions Trading Scheme for CO2 established in 2005 is the world's largest emissions trading scheme. Since it covers only some sectors of the European economies it can nevertheless not ensure that the Kyoto targets are reached at...

This paper develops an efficiency theory of contingent trade policies. We model the competition for a domestic market between one domestic and one foreign firm as a pricing game under incomplete information about production costs. The cost...